As part of its latest study on the effectiveness of industry self-regulation in preventing advertising and marketing of alcoholic beverages to underage audiences, on April 12, the Federal Trade Commission issued orders to provide information, also known as compulsory process orders, to 14 major alcoholic beverage advertisers. For the first time, the agency wants these companies to provide detailed information on their Internet and digital marketing programs and their data collection, maintenance, aggregation and tracking practices related to consumers/visitors under the age of 21.

The FTC reportedly decided to include digital marketing and data collection in this study after reviewing comments related to growth in the use of digital and social media strategies by the alcohol industry. The three main alcoholic beverage industry trade associations, the Beer Institute, the Distilled Spirits Council of the United States, and the Wine Institute, have self-regulatory compliance systems to minimize advertising reaching underage audiences. More recently, the industry itself has attempted to address digital marketing. In February 2012, the Beer Institute revised its compliance code to include new provisions addressing digital and social media, Internet privacy, and user-generated content, and in September 2011, the Distilled Spirits Council implemented new guidelines to address marketing on social networking sites and other digital platforms. The FTC’s order also requests information on the companies’ compliance practices related to these self-regulatory guidelines.

As in its previous three studies (completed in 1999, 2003 and 2008), the FTC is requesting background information on the companies and their products, including sales and revenue data, and information on advertising expenditures in various media, including television, radio, magazine, newspaper, internet/digital advertising, transit, outdoor, in-cinema, direct mail, point-of-sale advertising, product placement, promotional and public events expenditures, sponsorships of sports teams or athletes, and telemarketing, as well as social responsibility programs and messages. The 14 major alcoholic beverage advertisers must produce responses to the FTC by June 11, 2012.

In what is reportedly an effort to prevent further regulation of advertising of alcoholic beverages in Europe, the World Federation of Advertisers (WFA) and eight marketers that account for the majority of alcohol ad spending in Europe have unveiled the Responsible Marketing Pact, a self-regulatory program that will create common standards with which beer, wine and spirits producers across the European Union would comply. The standards would further three key goals:

Preventing alcohol advertising on social media from inadvertently reaching underage users, including implementing standards for effective age-related controls, Facebook-sponsored stories and user-generated content, as well as controls on sharing and forwarding content.

Limiting exposure of minors to alcohol ads across all media, including setting a common “adult demographic standard” limiting advertising to media where at least 70 percent of the audience is over the legal purchasing age (which is 18 in most countries, 16 in a few).

Ensuring that the content of alcohol advertising appeals primarily to adults.

In addition to new common guidelines, the Pact also strengthens compliance and enforcement. Accenture and national advertising self-regulatory organizations in the EU will independently monitor implementation and compliance and will publicly report their results. The Pact also gives the national self-regulatory organizations responsibility for enforcing the standards, including the imposition of “sanctions including public naming and shaming, mandatory pre-clearance for future campaigns, and referral to the competent national regulatory authorities in cases of repeat offences.” The European Alcohol and Health Forum (EAHF) will also play a role in overseeing compliance.

The Responsible Marketing Pact is a “commitment” by the WFA and the eight companies to the EAHF and will be subject to continuous oversight by the European Commission. The WFA intends to present a first progress report on implementation and compliance by June 2013 and a final report by February 2015.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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